This chapter looks at the revolution that technological advances in communication technologies has created for electronic. It is most important to understand how these new ways of conducting business necessitate changes in business processing of events as the nature of the events have changes (in some cases completely bypassing the need for human interactions). These business process changes necessarily create needs for new accounting of these processes and for new controls to placed on these processes. Electronic Business, may be defined broadly as any business process that relies on an automated information system. Today, this is mostly done with Web-based technologies. The term "e-business" was coined by Lou Gerstner, CEO of IBM.
Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.
E-business connections:
Back Office - internal processes, such as distribution, manufacturing and accounting.
Front Office - external processes, such as marketing, sales and customer service.
Modes of Processing Business Events:
Periodic--Delays between the steps of data processing
Immediate--Events are recorded as they occur, updating the master data files instantaneously.
Methods for capturing e-business events:
Automated Manual Systems (4 steps)
--Business event occurs, usually recorded on a source document
--Record business event data, entered into a computer using an offline device
--Update master data--all entered data brought to the computer, summarized, and calculated
--Generate output reports for managers and other authorized parties.
.
Online Transaction Entry (OLTE) --The business event is recorded immediately into the information system, bypassing the need for a source document. Otherwise this is the same as the automated manual system
Online Real-Time (OLRT) (3 steps)
--Business event occurs and business event data is recorded, again eliminating source documents, like the OLTE system
--Master data is updated, though this time the master data is updated within minutes of the transaction.
--Generate reports, usually done on a periodic basis, but capable of being retrieved on an as-needed basis.
Online Transaction Processing (OLTP) -- Business events and data are recorded in real time to collect and process transactions, post changes to shared databases and to support e-commerce and other time-critical applications. OLTP vs Batch Processing
Electronic Document Management- The capturing, storage, management, and control of electronic document images for the purpose of supporting management decision making and facilitating business event data processing. EDM systems provide a relatively inexpensive alternative to paper documentation. In general, business applications of EDM fall into two categories:
Document Storage and retrieval
Business event data processing
Electronic Data Interchange (EDI)- The computer-to-computer exchange of business data (i.e., documents) in structured formats that allow direct processing of those electronic documents by receiving computer system. One of the main advantages of EDI is the significant reduction in need for interaction between purchasers and salespeople, coupled with the standard implementation of online transaction entry (OLTE).
Internet Commerce - is the comoputer-to-computer exchange of business event data in structured or semistructured formats via Internet communication that allows the initiation and consummation of business events.The two primary categories of e-business that exist over the wev are B2C and B2B.
Who: Two examples ~ WebTrust and SysTrust
Why: Users of electronic accounting systems might need assurance that the financial and operating data has integrity
How: Access the link to the 2002 CPA Journal - http://www.nysscpa.org/cpajournal/2002/0302/features/f032602.htm
Value Added Network Service:
A value-added network (VAN) is a private network provider (sometimes called a turnkey communications line) that is hired by a company to facilitate electronic data interchange (EDI) or provide other network services. Before the arrival of the World Wide Web, some companies hired value-added networks to move data from their company to other companies. With the arrival of the World Wide Web, many companies found it more cost-efficient to move their data over the Internet instead of paying the minimum monthly fees and per-character charges found in typical VAN contracts. In response, contemporary value-added network providers now focus on offering EDI translation, encryption, secure e-mail, management reporting, and other extra services for their customers. (Note: the attached link provides more information about VAN's ~ http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci341986,00.html
E-Business
This chapter looks at the revolution that technological advances in communication technologies has created for electronic. It is most important to understand how these new ways of conducting business necessitate changes in business processing of events as the nature of the events have changes (in some cases completely bypassing the need for human interactions). These business process changes necessarily create needs for new accounting of these processes and for new controls to placed on these processes.Electronic Business, may be defined broadly as any business process that relies on an automated information system. Today, this is mostly done with Web-based technologies. The term "e-business" was coined by Lou Gerstner, CEO of IBM.
Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.
E-business connections:
Modes of Processing Business Events:
Methods for capturing e-business events:
- Automated Manual Systems (4 steps)
--Business event occurs, usually recorded on a source document--Record business event data, entered into a computer using an offline device
--Update master data--all entered data brought to the computer, summarized, and calculated
--Generate output reports for managers and other authorized parties.
.
- Online Transaction Entry (OLTE) --The business event is recorded immediately into the information system, bypassing the need for a source document. Otherwise this is the same as the automated manual system
- Online Real-Time (OLRT) (3 steps)
--Business event occurs and business event data is recorded, again eliminating source documents, like the OLTE system--Master data is updated, though this time the master data is updated within minutes of the transaction.
--Generate reports, usually done on a periodic basis, but capable of being retrieved on an as-needed basis.
Methods for conducting E-Business:
Miscellaneous (but important) Concepts:
- Assurance providers (who, why, how)
Who: Two examples ~ WebTrust and SysTrustWhy: Users of electronic accounting systems might need assurance that the financial and operating data has integrity
How: Access the link to the 2002 CPA Journal - http://www.nysscpa.org/cpajournal/2002/0302/features/f032602.htm
- Value Added Network Service:
A value-added network (VAN) is a private network provider (sometimes called a turnkey communications line) that is hired by a company to facilitate electronic data interchange (EDI) or provide other network services. Before the arrival of the World Wide Web, some companies hired value-added networks to move data from their company to other companies. With the arrival of the World Wide Web, many companies found it more cost-efficient to move their data over the Internet instead of paying the minimum monthly fees and per-character charges found in typical VAN contracts. In response, contemporary value-added network providers now focus on offering EDI translation, encryption, secure e-mail, management reporting, and other extra services for their customers. (Note: the attached link provides more information about VAN's ~ http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci341986,00.htmlRelated Reading
An interesting writeup on the nature of Modern E-business. Delves a bit into digital distribution. LinkWikibooks chapter on online business. http://en.wikibooks.org/wiki/E-Commerce_and_E-Business